Memorandum of Conversation, by Mr. Alger Hiss, Assistant to the Adviser on Political Relations ( Hornbeck )

Participants: Mr. Playfair of the British Treasury
Mr. Achilles13
Mr. Hiss

Mr. Playfair called on Mr. Achilles by appointment to discuss matters relating to reciprocal Lend-Lease for China. At Mr. Achilles’ request Mr. Hiss participated in the conversation.

Mr. Playfair read from a telegram from Chungking which the British Embassy has recently received. In this telegram it was stated that the British Military Attaché at Chungking has been discussing with General Stilwell the matter of reciprocal aid from China for American and British troops stationed in China. It was further stated that the British Military Attaché understood that this matter was under discussion in Washington between the Chinese and the American Government. The statement was then made that bulk articles, freight charges, personal services and the like would be supplied by China but that personal out-of-pocket expenses of Allied troops would not be covered. Statement was also made that the Chinese initiative in the matter might be due to a desire to discourage the American demand for improvement in the exchange rate as applied to American [Page 524] troops in China or to the Chinese desire to supervise more closely American military activities in China. The British Military Attaché was said to be of opinion that it was important that authority be clearly retained to make cash purchases in order to supplement whatever aid the Chinese might agree to furnish, for the reason that Chinese standards would be inadequate for proper maintenance and housing of British soldiers.

In the course of conversation Mr. Playfair was told with respect to the points referred to above that the Chinese have taken no initiative in this matter in Washington, in fact no discussions of a reciprocal Lend-Lease agreement have taken place with the Chinese in Washington, although the matter has received consideration within this Government and we would undoubtedly be pleased to discuss the matter at any time with the Chinese were they to request us to do so; that we have had no information that General Stilwell has in fact discussed with the Chinese an actual agreement although we understand that in various instances the Chinese have offered as an ad hoc matter to furnish certain things gratis; that the British Military Attaché may wish to inquire of the War Department as to arrangements now in force between General Stilwell and the Chinese authorities with respect to American troops in China; that it appears likely that the primary Chinese aim—whatever subsidiary motives may be present—in offering supplies and services is to share in the common war effort; that it seems likely that any reciprocal aid agreement which the United States may enter into with China will not interfere with General Stilwell’s authority to make cash purchases or to procure services for cash; and that it seems questionable whether the issue of differing standards of maintenance would be likely to arise under such an agreement for the reason that presumably acquisition of supplies from China under reciprocal aid arrangements would be bulk lots rather than of individual rations.

Mr. Playfair said that he would be glad to communicate to the Department such further information as the Embassy might receive in this matter and he said that the Embassy would in turn appreciate being kept informed of our thought on this subject.

  1. Theodore Achilles, Division of European Affairs.